The International Monetary Fund (IMF) is on a collision course with chancellor George Osborne and Bank of England governor Mervyn King after the Washington-based agency voiced concern over Britain's refusal to support a funding package to tackle the eurozone crisis.

Dominique Strauss-Kahn, the head of the IMF, said Europe needed to come up with a more coherent plan to deal with government debt following the bailouts of Ireland and Greece. He criticised piecemeal attempts to resolve individual countries' debt problems, which critics believe leads to instability and undermines investor confidence in Europe.

The likelihood of prolonged negotiations over a Portuguese bailout deal was another instance of the need for an overarching mechanism to deal with all EU countries should they get into trouble, Strauss-Kahn told the IMF's spring conference.

However, Osborne has made it clear that he believes resolving the debt problems of eurozone countries is a matter for the eurozone and not for the broader EU, which includes nations with their own currencies.

The UK is expected to participate in raising €85bn-€90bn (£52bn-£55bn) to support Portugal, but Osborne has told France and Germany there will be no more cash from the UK for eurozone bailouts after the Portugal deal.

The chancellor would like to go further and repeal article 122 of the Treaty of Lisbon, which has been used to corral EU member states to bail out Ireland and Greece. The treaty says: "Where a member state is in difficulties or is seriously threatened with difficulties caused by natural disasters or exceptional occurrences beyond its control, the council, on a proposal from the commission, may grant, under certain conditions, union financial assistance to the member state concerned."

A move to amend the article is seen as essential if Britain is to avoid taking part in further bailouts.

It is understood the Bank of England also views the debt problems of eurozone members as a matter for countries within the euro area.

Strauss-Kahn said that a "European deal" needs to be in place because "the piecemeal approach is not working". And Olivier Blanchard, the IMF's chief economist, said the European debt crisis was one of the most crucial issues holding back the world economy and preventing the restoration of confidence: "How Europe is going to get out of a hole is a very big issue."

The IMF is understood to want Brussels to coordinate a long-term strategy with funding facilities that indebted countries can access without the need for further negotiations. Eurozone leaders have agreed to put in place a €500bn European Stability Mechanism (ESM), but the scheme will not be ready until 2013 and relies on France and Germany as lead underwriters of the fund.

IMF officials fear that without a speedier resolution and the participation of Britain and other richer EU nations outside the eurozone, in particular Sweden and Denmark, the investor spotlight will fall on other heavily indebted countries such as Italy, Belgium, Spain and Hungary.

Italy has a debt to GDP ratio of 110%, while Belgium's debts have reached 98% of GDP. Spain and Hungary have lower total debts, but remain in recession and investors are concerned these countries will find it difficult to grow and create jobs while implementing unprecedented spending cuts.

If any of these countries gets into trouble, several investor institutions have argued that the current funding mechanisms will be unable to cope, triggering another sovereign debt crisis.

Earlier this month EU finance ministers, including Osborne, met in Hungary to discuss the terms of Portugal's bailout package. Osborne ruled out offering direct bilateral loans to Lisbon, but is expected to participate in an EU-wide funding package and a large slice of funding via the IMF.

The IMF has part-funded the Greek and Irish bailouts. It has become increasingly frustrated at the hardline attitude of Berlin and London to the support, which has only been offered at high interest rates and with terms that demand dramatic cuts in spending and higher taxes. The IMF recently loosened the terms of Greece's IMF loans after attempts to recoup lost taxes from the country's wealthy businesspeople failed.

Strauss-Kahn said he was anxious that weakening growth and high youth unemployment would lead to social unrest.

The IMF cut its 2011 forecast for Irish GDP growth to 0.5% from 0.9% and said unemployment would hit 14.5%, from the 13.5% anticipated previously.

Despite the gloomy prognosis, he said he was confident Greece and Ireland would meet their debt obligations and begin to recover, but concern remained over the protection offered by the EU for future crises.

Moody's cited Ireland's weaker growth prospects when it cut the country's rating by two notches to the verge of junk status and kept its outlook on negative, meaning the next move could also be down.

Osborne said Spain showed that eurozone countries were capable of regaining investor trust without further support from EU countries. He praised the socialist government of José Luis Rodríguez Zapatero for restoring investor trust in the country after months of speculation that it would follow Portugal in needing a bailout.